Lawrence Bategeka, the National Economy Committee Vice Chairperson told URN that all approved loans requests were important and majorly meant to finance the National Budget especially due to inadequate revenue collection.
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loans to the tune of Shillings 6.15 trillion this year, according to the annual
performance report of the house.
This included a Shillings
768 billion (US Dollar 210 million) loan from the Islamic
Development Bank (IDB) for the upgrade of Rwekunye-Apac-Lira-Acholibur Road, Shillings
402.5 billion (US Dollar 110 million) also from IDB for the upgrade of
Muyembe-Nakapiripirit Road, Shillings 18.29 billion (US Dollars 5 million) from
the Export-Import Bank of India and Shillings 54.89 billion (US Dollars 15
million) from the African Development Bank [AfDB] as guarantee for credit lines
to Uganda Development Bank Limited (UDBL).
The others included Shillings 1.39 trillion Shillings (US Dollars 379.71 million) in
promissory notes to FINASI/Roko Construction SPV Limited for the construction
of the International Specialized Hospital of Uganda at Lubowa, Wakiso District,
Shillings 380 billion (US Dollars 100million) from the domestic market to
finance classified expenditure under the Defense and Veteran Affairs Ministry for the financial year 2018/2019, Shillings
731.8 billion (US Dollars 200 million) from the International Development
Association (IDA) of the World Bank Group to support the Uganda
Intergovernmental Fiscal Transfers Program (UgIFT) for results in Education and
Health sectors among others.
According to the report,11 loan request proposals were tabled
by the Finance Planning and Economic Development Ministry. The loan requests
were first scrutinized by the Parliament National Economy Committee Chaired by
Nakaseke North MP, Syda Bbumba before they tabled before the house for
discussion and final approval.
Lawrence Bategeka, the National Economy
Committee Vice Chairperson told URN that all approved loans requests were
important and majorly meant to finance the National Budget especially due to inadequate
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He pointed out the approved loans for the construction of oil
roads and Lubowa Specialized hospital as one of the key loan decisions
parliament made in the year.
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While presenting his 2018 Audit report to the Speaker Rebecca
Kadaga in January this year, the Auditor General, John Muwanga noted that the
rate of borrowing by the country had increased the public debt by 22 percent
from Shillings 33.99 trillion as at June 2017 to Shillings 41.51 trillion on as
of June 30th, 2018.
"Although Uganda's debt to GDP ratio of 41 percent is
still below the International Monetary Fund (IMF) risky threshold of 50 percent
and compares well with other East African countries, it is unfavorable when
debt payment is compared to national revenue collected which is the highest in
the region at 54 percent", read the audit report.
Muwanga then said that payment of loans worth Shillings
3.9 trillion, which are part of those he had studied, expire in 2020. He said
if government is to service the loans as projected in the current financial
year 2019/2020, it would require more than 65 percent of the total revenue
collections, which is over and above the sustainability levels of 40 percent.
He also noted that some loans absorption levels are as low as
10 percent. Keto Nyapendi Kayemba, the Deputy Auditor General, says that
their office carried out a special audit on Public Debt Management and that
government needs to pay more attention to the indebtedness.
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Bategeka insists that the loans approved are well intentioned
since his committee wants the economy to do well.